StayWealthy.com» Options trading

Updates on Option Trading

PipSqueak — Fri, 10 Aug 2007 16:03:42 +0000

Sorry guys, haven’t updated for a while. I had this post in my draft for quite a long time, I should have posted earlier.

As said by “e.” in my May option post: [quote]Also, mixing strategies on your portfolio – is not a good idea. It muddies the clarity of your actions. I open a position with a limit-order, and follow up with a trailing stop to close me out, because I, a. know my entry point in-advance, b. know my exit point in advance and c. know my acceptable losses – in advance. I am my own worst enemy – trades I place should be on autopilot – taking my emotions (fear+greed) out of the equation.[/quote]

Excellent point. I had become very emotional with my trading these few months and it’s hurting my account badly… I’m in the red now. About 40% of my original capital is gone. That means I’ve lost all my profits from last year plus 40% of what I had originally put in. I won’t post the trades here coz I haven’t updated for a while and I can’t even remember which stocks are from which system anymore.

I was following Wang’s picks (recommended by a friend) and just kept on losing, but Wang made money. I just want to clarify this though, Wang’s picks is not a stock pick service at that time. He was just displaying his trades like what I’m doing except his is real time. I tried trading one or two of his stocks and got some gains, so I decided to go all in (I don’t mean 100% capital, perhaps 20% each time). Little did I know Wang’s an aggressive trader, sometimes he averages his cost, sometimes he buys options on expiry day and sell it on the same day. With my $3k it just wasn’t enough to trade like him. At one point, my option buying power couldn’t afford to keep up anymore. Another thing was, the market started going downhill and so did my funds.

I am focusing more on my online business that puts money in my pocket every month instead and put my funds in a forex investment fund my friend is starting, he has a good track record and the estimated return is about 5-15% per month. It doesn’t mean I’m giving up no trading though, I just need to re-align my focus. There are sooo many trading strategies out there but I was more interested in reading about online marketing materials than trading ones. Very ironic considering that 90% of my blog is about my trades (It’s easier to publish my trades than write about online business… I’m just lazy to type hehe… maybe I should go video ). Anyway, my point is… I’ll come back to trading when I’m ready again.

I’d still recommend Masters ‘O’ Equity, I have to admit that I started losing more $ when I drifted away from this trading system. Such a pity but a good lesson about discipline and patience. Moreover, a friend that I introduced to the system became the Master Star Trader of September 2007 (way to go, Bruce!).

May 2007 Option Trades

Thu, 01 Jan 1970 00:00:00 +0000

The bad month continues… . I stopped trading in the middle of May to get a breather. I think if I were to get revenge on the market, my funds will probably get less. I figured it was my desperation to break the $5k mark that clouded my decision-making as well. I bought VMC based on Option Intelligence’s recommendation and seeing that it wasn’t doing well, I still held on as if some miracle will happen. Of course, that didn’t happen so I let it expire since it was way out of the money already (luckily I took only one contract).

Some of my other trader friends (who aren’t using star trading system) aren’t doing very well as well, this is so weird. I thought people should be making money when the market’s up, up, up.

Balance after exit trades made in November: $2,757.47 (-14.10%). Click “read more” to see my trades.

Account Trade History
EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
Star Trading System
5/1/07 21:52:46	SINGLE	BUY	+1	VMC	100	MAY 07	125	CALL	1.10	1.10
RETURN: -100% (let expire)
5/4/07 22:30:38	SINGLE	BUY	+2	ICE	100	MAY 07	140	CALL	3.20	3.20
5/7/07 22:06:15	SINGLE	SELL	-2	ICE	100	MAY 07	140	CALL	2.25	2.25
RETURN: -29.69%
Options Intelligence Picks
5/3/07 23:40:44	SINGLE	BUY	+5	GMT	100	JUN 07	50	CALL	1.75	1.75
5/22/07 00:40:33	SINGLE	SELL	-3	GMT	100	JUN 07	50	CALL	2.05	2.05
5/22/07 22:25:07	SINGLE	SELL	-2	GMT	100	JUN 07	50	CALL	2.05	2.05
RETURN: +17.14%
5/17/07 02:21:12	SINGLE	BUY	+3	ROSE	100	JUN 07	25	PUT	1.90	1.90
5/21/07 23:15:58	SINGLE	SELL	-3	ROSE	100	JUN 07	25	PUT	1.10	1.10
RETURN: -42.11%

Total loss for the month: -154.66%
Average loss for the month: -38.67%

April 2007 Option Trades

Thu, 01 Jan 1970 00:00:00 +0000

Not my proudest month. A combination of bad luck and stupidity: ROK’s CFO resigned and caused the stock to drop like a tank, HOG was a gamble at the earnings play. I was also scaling up on OEX puts (Options intelligence picks) with the belief that the market is reaching resistance, but it didn’t and kept on going up. I hate losing, and I’m losing badly in this month (May) too … ARGH!

Balance after exit trades made in November: $3,210.11 (-28.98%). Click “read more” to see my trades.

Account Trade History
EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
Star Trading System
4/3/07 22:25:14	SINGLE	BUY	+4	ROK	100	APR 07	60	CALL	2.20	2.20
4/5/07 21:36:35	SINGLE	SELL	-4	ROK	100	APR 07	60	CALL	.90	.90
RETURN: -59.09%
4/12/07 22:22:24	SINGLE	BUY	+3	HOG	100	MAY 07	62.5	PUT	2.75	2.75
4/19/07 21:39:31	SINGLE	SELL	-3	HOG	100	MAY 07	62.5	PUT	1.30	1.30
RETURN: -52.73%
4/27/07 22:54:22	SINGLE	BUY	+7	COO	100	JUN 07	55	CALL	1.00	1.00
5/3/07 01:56:11	SINGLE	SELL	-3	COO	100	JUN 07	55	CALL	1.30	1.30
5/8/07 21:54:23	SINGLE	SELL	-4	COO	100	JUN 07	55	CALL	.70	.70
RETURN: -4.29%
Options Intelligence Picks
4/16/07 23:44:30	SINGLE	BUY	+1	OEX	100	MAY 07	640	PUT	1.70	1.70
4/18/07 00:22:01	SINGLE	BUY	+1	OEX	100	MAY 07	635	PUT	1.20	1.20
5/1/07 22:11:48	SINGLE	BUY	+1	OEX	100	MAY 07	640	PUT	.90	.90
4/20/07 22:10:35	SINGLE	BUY	+1	OEX	100	MAY 07	640	PUT	1.15	1.15
5/3/07 00:48:33	SINGLE	SELL	-3	OEX	100	MAY 07	640	PUT	.50	.50
5/4/07 02:17:28	SINGLE	SELL	-1	OEX	100	MAY 07	635	PUT	.35	.35
RETURN: -62.9%

Total loss for the month: -179.01%
Average loss for the month: -44.75%

March 2007 Option Trades

Thu, 01 Jan 1970 00:00:00 +0000

All winners this month except for mistakenly putting a limit order instead of a stop loss on my OEX puts. I ended up buying half of my original purchase after the accident because the OEX trade was not part of the star trading system, I was not very confident about it. I used the support and resistance from the point and figure chart with 30 and 50MA indicators to decide whether to get in this trade. Thanks to Lastchance who enlightened me about support and resistance using point and figure charts. He’s been trying to get me to learn it for months and I only picked it up after he’s successfully done a few trades.

The good thing about all these trades was that I made the sell decision based on the support and resistance and so far they are doing okay. It feels good to be certain about when to exit.

Balance after exit trades made in November: $4,519.78 (+18.94%). Click “read more” to see my trades.

Account Trade History
EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
3/7/07 23:47:44	SINGLE	BUY	+4	CNQ	100	APR 07	50	CALL	2.70	2.70
3/9/07 23:50:07	SINGLE	SELL	-2	CNQ	100	APR 07	50	CALL	3.40	3.40
3/10/07 02:27:04	SINGLE	SELL	-1	CNQ	100	APR 07	50	CALL	3.90	3.90
3/12/07 23:20:10	SINGLE	SELL	-1	CNQ	100	APR 07	50	CALL	3.30	3.30
RETURN: +29.63%
3/22/07 21:36:23	SINGLE	BUY	+2	OEX	100	APR 07	650	PUT	5.30	5.30
3/23/07 01:01:33	SINGLE	SELL	-2	OEX	100	APR 07	650	PUT	4.90	4.90
RETURN: -7.55%
3/23/07 01:05:30	SINGLE	BUY	+1	OEX	100	APR 07	650	PUT	5.10	5.10
3/28/07 21:40:02	SINGLE	SELL	-1	OEX	100	APR 07	650	PUT	7.50	7.50
RETURN: +39.51%
3/23/07 22:24:34	SINGLE	BUY	+4	UHS	100	APR 07	60	PUT	2.25	2.25
3/27/07 23:42:47	SINGLE	SELL	-3	UHS	100	APR 07	60	PUT	2.90	2.90
3/28/07 02:14:56	SINGLE	SELL	-1	UHS	100	APR 07	60	PUT	3.00	3.00
RETURN: +30%

Total profits for the month: +91.59%
Average profit for the month: +22.90%

February 2007 Option Trades

Thu, 01 Jan 1970 00:00:00 +0000

I started the new “trading strategy” this month. It’s options-intelligence.com and frankly speaking, I don’t even see it as a “strategy”. There’s very heavy reliance on the picks and the service is so vague and the service provider so fickle-minded. One e-mail says to buy if it goes through XXX price, and next e-mail says to sell it immediately because of market conditions (even though the stock/index met his price conditions). This is what happened with CROX and I was fumed. It was also my fault for not starting small with these picks resulting in a big loss.

Options-intelligence has two services, Dave’s play and Core strategy. My friends and I bought the Core Strategy system which is a membership that lasts a lifetime. The core strategy consists of 13 counters (stocks and indices) that is to be traded during the options expiry week (3rd week of each month). Included with the package is access to the options-intelligence blog which posts the blog owner’s trades from time to time (blog owner and OI owner is different, surprisingly). Although I’m dissatisfied with the core strategy, a few of my friends told me that the picks on the OI blog is really good so the purchase was well worth it after all.

Picks from Option-Intelligence core strategy this month are: DIA, QQQQ and CROX.

Only two star trading system pick this month (AGE and CHRW) because I went for a vacation during the Chinese New Year holidays.

Balance after exit trades made in November: $3,800.04 (-20.24%) *OUCH*. Click “read more” to see my trades.

Account Trade History
EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
2/1/07 23:21:10	SINGLE	BUY	+3	AGE	100	MAR 07	65	CALL	3.30	3.30
2/14/07 00:31:57	SINGLE	SELL	-3	AGE	100	MAR 07	65	CALL	2.15	2.15
RETURN: -34.85%
2/12/07 22:30:52	SINGLE	BUY	+1	DIA	100	FEB 07	126	CALL	.60	.60
2/13/07 00:45:26	SINGLE	SELL	-1	DIA	100	FEB 07	126	CALL	.50	.50
RETURN: -16.67%
2/12/07 22:35:19	SINGLE	BUY	+2	QQQQ	100	FEB 07	44	CALL	.34	.34
2/14/07 23:02:41	SINGLE	SELL	-2	QQQQ	100	FEB 07	44	CALL	.45	.45
RETURN: +32.35%
2/12/07 23:32:11	SINGLE	BUY	+3	CHRW	100	MAR 07	55	PUT	4.20	4.20
2/15/07 00:31:01	SINGLE	SELL	-3	CHRW	100	MAR 07	55	PUT	2.95	2.95
RETURN: -29.76%
2/13/07 22:36:25	SINGLE	BUY	+3	CROX	100	FEB 07	55	CALL	1.30	1.30
2/13/07 23:44:49	SINGLE	SELL	-3	CROX	100	FEB 07	55	CALL	.55	.55
RETURN: -57.69%

Total Loss for the month: -106.62%
Average Loss for the month: -21.32%

January 2007 Option Trades

Thu, 01 Jan 1970 00:00:00 +0000

GLW could have been a winner if I did not leave the last contract to gamble on the earnings news. I ended up with a small loss of 1.56%.

Balance after exit trades made in November: $4,764.62 (+10.55%). Click “read more” to see my trades.

Account Trade History
EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
1/11/07 23:18:02	SINGLE	BUY	+2	SGR	100	APR 07	30	CALL	4.60	4.60
1/18/07 22:33:09	SINGLE	SELL	-2	SGR	100	APR 07	30	CALL	4.00	4.00
RETURN: -13.04%
1/18/07 23:26:02	SINGLE	BUY	+3	GLW	100	FEB 07	22.5	PUT	3.20	3.20
1/24/07 01:21:57	SINGLE	SELL	-2	GLW	100	FEB 07	22.5	PUT	3.60	3.60
1/24/07 22:32:45	SINGLE	SELL	-1	GLW	100	FEB 07	22.5	PUT	2.25	2.25
RETURN: -1.56%
1/27/07 00:38:39	SINGLE	BUY	+3	ANN	100	FEB 07	30	CALL	4.20	4.20
2/6/07 00:29:06	SINGLE	SELL	-3	ANN	100	FEB 07	30	CALL	4.70	4.70
RETURN: +11.90%
1/23/07 23:50:21	SINGLE	BUY	+5	ODP	100	FEB 07	40	PUT	1.90	1.90
1/27/07 02:12:21	SINGLE	SELL	-3	ODP	100	FEB 07	40	PUT	2.90	2.90
1/30/07 00:10:36	SINGLE	SELL	-1	ODP	100	FEB 07	40	PUT	2.80	2.80
1/30/07 00:10:36	SINGLE	SELL	-1	ODP	100	FEB 07	40	PUT	2.80	2.80
RETURN: +50.53%

Total Profits for the month: +47.83%
Average Profit for the month: +11.96%

2006 Option Trades Report Card!

Thu, 01 Jan 1970 00:00:00 +0000

I have summed up my trading performance for the year of 2006. Analyzed the amount of calls versus puts I traded and also the wins and losses on both. It’s nice to be able to look back. My initial goal was to make $1000 at the end of the year, I reached that goal sooner than I thought (March). I must have underestimated trading options, then I raised the bar to make $10k by the end of the year. Unfortunately, I couldn’t achieve that goal. However, I did manage to double my capital so I’m very pleased with year 2006. I look forward to another profitable trade in 2007 and will be trying a new system which I’ll also be blogging here.

Okay, presenting 2006 trade analysis. Drum roll please……

Starting Capital = $2,100.28

	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sept	Oct	Nov	Dec	Total
Total %/Mth	-34.05	+33.46	+221.89	-127.58	+120.92	+34.05	+47.41	+38.77	-27.38	-56.44	+167.91%	-45.33%	+373.63%
Avg %/Mth	-17.03	+5.58%	+55.47%	-18.23%	+30.23%	+11.35%	+11.85%	+6.46%	-13.69%	-14.11%	+33.58%	-15.11%	+31.14%
Cash Bal.	$2,035.39	$2086.09	$3,191.28	$2,206.34	$3,525.38	$3,920.19	$4,453.25	$4,676.92	$4,209.49	$3,464.17	$4,913.52	$4,309.94	+105.21%!!
Wins	1/2	2/6	3/4	3/7	3/4	2/3	3/4	4/6	1/2	1/4	3/5	0/3	26/49=53%
Call wins/ No. of Calls	1/2	2/3	3/3	2/6	2/3	2/3	2/2	3/4	0/0	1/2	1/1	0/2	19/31=61%
Put wins/ No. of Puts	0/0	0/3	0/1	1/1	1/1	0/0	1/2	1/2	1/2	0/2	2/4	0/1	7/19=37%

Total profit for the year = 373.63%
Average profit for the year = 31.14%
Increase in cash balance for the year = 105.21%!!!

December Option Trades 2006

Thu, 01 Jan 1970 00:00:00 +0000

IVGN was mistakenly sold off. After ASF was stopped out, I was surprised to see that I lost so much on that trade alone. All losers this month. LOL! Oh well, hope for another profitable year in 2007

Balance after exit trades made in November: $4,309.94 (-12.28%%). Click “read more” to see my trades.

Account Trade History
EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
12/15/06 01:04:48	SINGLE	BUY	+3	IVGN	100	JAN 07	60	PUT	3.70	3.70
12/15/06 01:07:20	SINGLE	SELL	-2	IVGN	100	JAN 07	60	PUT	3.60	3.60
12/15/06 01:07:20	SINGLE	SELL	-1	IVGN	100	JAN 07	60	PUT	3.60	3.60
RETURN: -2.7%
12/16/06 04:29:39	SINGLE	BUY	+4	ASF	100	JAN 07	40	CALL	3.30	3.30
12/19/06 02:00:19	SINGLE	SELL	-4	ASF	100	JAN 07	40	CALL	2.05	2.05
RETURN: -37.87%
12/20/06 23:50:40	SINGLE	BUY	+2	JBX	100	JAN 07	60	CALL	2.10	2.10
12/21/06 01:45:31	SINGLE	BUY	+3	JBX	100	JAN 07	60	CALL	2.10	2.10
1/5/07 04:20:33	SINGLE	SELL	-5	JBX	100	JAN 07	60	CALL	2.00	2.00
RETURN: -4.76%

Total Loss for the month: -45.33%
Average Loss for the month: -15.11%

Interesting thing that happened during JBX trade

Thu, 01 Jan 1970 00:00:00 +0000

I was cleaning my hard drive and noticed a text file which I created in November when I was trading JBX. I kept this conversation between me and the TOS customer support representative. It was a very interesting trading day because what happened was this: I had a $1.20 trailing on JBX and I know the trailing stop of $1.20 was still very far away, but my JBX option was sold as soon as the market opened. Feeling somewhat irritated, I contacted my broker through live support with an intention to rant because I didn’t think I could get back my stock option… but it turned out I could. =)

So the moral of the story is: When you think it’s not possible, RANT!

The following is my conversation with TOS support:
——————–

kms: answer for request: I had my option on a trailing stop loss, and it was sold as soon as the market opened

<< session started with support >>

kms: let me look

you: it was $1.20 trailing, I can’t believe that it’s sold when the market and the stock’s up!

kms: I am checking

kms: please give your phone #

kms: I will call the exchnge

you: XXXXXX

kms: ok we will correct this as we agree

kms: it should not have been sold

you: thanks

kms: the PSE exchange is busting it

kms: they are making bogus opening quotes or too wide tripping these orders

kms: I will take out the sale

you: does this happen often?

kms: this happened twice in this pit JBX

kms: its the only time I’ve ever saw it happen

you: how’d you know it happened twice?

kms: I had to call yesterday

kms: foranother customer

kms: please try a regular STOP if you can

kms: sorry for the trouble

you: okay, I got it… thanks very much for your help

kms: hello

kms: good thanks

November Option Trades 2006

Thu, 01 Jan 1970 00:00:00 +0000

I’m baaccckkk!!! My doubled capital is back, thanks to SCSS which gapped down and gave me a 191% return on the trade alone! 6 trades and only 2 lost this time.

I’m kicking myself for selling ASH on the same day at 10% profit, what’s worse was that it wasn’t an exit signal according to the rules. If I had held on, it’d have given me an almost 100% return like TXT did. Check out the charts of ASH and note the candles from 1st till 14th November 2006. Sigh.

Balance after exit trades made in November: $4,913.52 (+41.84%). Click “read more” to see my trades.

Account Trade History
EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
11/2/06 23:04:56	SINGLE	BUY	+2	FFIV	100	DEC 06	70	PUT	6.90	6.90
11/7/06 22:38:07	SINGLE	SELL	-2	FFIV	100	DEC 06	70	PUT	5.06	5.06
RETURN: -26.67%
11/8/06 00:22:36	SINGLE	BUY	+2	JBX	100	DEC 06	50	CALL	6.50	6.50
11/15/06 22:37:42	SINGLE	SELL	-1	JBX	100	DEC 06	50	CALL	7.80	7.80
11/18/06 00:27:33	SINGLE	SELL	-1	JBX	100	DEC 06	50	CALL	8.40	8.40
RETURN: +24.62%%
11/21/06 00:10:00	SINGLE	BUY	+5	SCSS	100	DEC 06	22.5	PUT	1.50	1.50
11/29/06 03:03:16	SINGLE	SELL	-1	SCSS	100	DEC 06	22.5	PUT	2.00	2.00
11/30/06 22:30:11	SINGLE	SELL	-1	SCSS	100	DEC 06	22.5	PUT	5.30	5.30
11/30/06 22:58:35	SINGLE	SELL	-2	SCSS	100	DEC 06	22.5	PUT	5.00	5.00
12/4/06 22:36:52	SINGLE	SELL	-1	SCSS	100	DEC 06	22.5	PUT	4.50	4.50
RETURN: 190.67%
11/23/06 00:06:03	SINGLE	BUY	+2	HIG	100	JAN 07	90	PUT	4.00	4.00
11/28/06 02:00:42	SINGLE	SELL	-2	HIG	100	JAN 07	90	PUT	5.20	5.20
RETURN: +30%
11/29/06 00:28:28	SINGLE	BUY	+3	STLD	100	JAN 07	32.5	PUT	2.30	2.30
12/4/06 23:21:43	SINGLE	SELL	-3	STLD	100	JAN 07	32.5	PUT	1.70	1.70
RETURN: -26.09%

Total profit for the month: +167.91%
Average profit for the month: +33.58%